





TC 0x5 


LETTER 




TO THE STOCKHOLDERS 


OF THE 


CHESAPEAKE & OHIO CANAL COMPANY, 


* r 

t ^ 


I 

V 





FROM 


JOHN S. GITTINOS 


OF THE 


CITY OF BALTIMORE 


BALTIMORE- 

FlUNTLD BY JOS El'll ROBINSON 

i 1 S 

Hk 



1843 . 











LETTER. 


To the Stockholders of the 

Chesapeake and Ohio Canal Company: 

You have doubtless seen the proceedings of the late Gene¬ 
ral meetings of the company, published for the first time so 
far as I know, in the National Intelligencer of the 31st August 
last. You have, of course, read those proceedings, and such 
of you as are my personal acquaintances will doubtless have 
felt equal surprise with myself, at the censures so liberally 
bestowed upon me. I propose, as briefly as I may, to inquire 
into their justice. 

I have been arraigned for my execution of a trust. The 
character of that trust a few words will explain. 

On the 15th April, 1840, a deed was executed in favor of 
Messrs. James Swan, William Gunton and myself, by which 
^=90,250 of State five per cents, were lodged with us for sale, 
the proceeds to be applied to the discharge of script which 
had been issued to contractors for work done on the canal. 
The contemplated duration of our duties was six months, and 
the surplus, if any, of the trust funds was to be handed over 
to the company. 

A prior deed, under date of the 22d January, 1840, had 
been tendered to my co-trustees and myself, looking in some 
degree to the same objects, but we declined acting under it, 
and the instrument of the 15th April, 1840, was accordingly 
substituted. 

The complaints against me are, First, that I failed to make 
as much of the bonds as I might have done, Secondly, that I 
have been allowed too high a commission, Thirdly, that I 
have applied the funds to unauthorised purposes, and Fourthly, 
that I have not paid over the balance in my hands. 




4 


When I shall have answered these charges, I will devote a 
few words to my associates in the trust, and their conduct in 
relation to it. 

1.—Of the amount realised for the State bonds. 

If what was obtained be compared with what the company 
was willing to have taken, I have merited praise instead of 
blame. The board would have been content at the inception 
of the trust with 85, at which rate the bonds would have 
yielded $340,944. In point of fact, they yielded, under my 
management of them, $345,559 clear of all charges for com¬ 
missions, interest and expenses, being a net gain over what the 
company was willing to have taken of $4,615. 

If the comparison be instituted betwixt the results of my 
agency, and those of other agencies, created by the company 
with similar duties, the difference in my favor will be still 
more striking. The whole amount of five per cent, bonds 
granted by the State to the company, was £1,056,375; and 
various hands were employed in disposing of them. By a 
tabular statement, published amongst the proceedings of the 
general meetings referred to, the rates obtained were as fol¬ 
lows : 

For £644,000 sold by George Peabody, London, the rate ob¬ 
tained was 71.237 per cent. 

For £98,000 sold in Baltimore, 85 per cent* 

For £24,000 sold to various creditors, 84.95 per cent. 

For £58,250 sold at New York, 67 per cent. 

For £90,250 sold by me, 85.79 per cent. 

From which it appears that I realised more than any other 
agent of the company, the excess of my rates over Mr. Pea¬ 
body’s, who is styled the “ former valued agent of the com¬ 
pany,” being no less than fourteen per cent. 

But it is said that Mr. Swan obtained 90 for similar bonds 
held by the Merchants Bank, of which he is president, and 
that sales might have been effected by the trustees at the same 
rate. It is true that Mr. Swan did realise this amount for a 


* This amount was not sold, properly speaking', but parted with by the com¬ 
pany in settlement of debts due to the banks. 


5 


small portion of the bonds held by his bank, but that this was 
only accidental is proved by the fact that the bulk of the 
bonds, owned by that bank, were sold by him at 85 upon six 
months. If 90 could have been obtained for more, is it credi¬ 
ble that Mr. Swan would not have closed the balance in his 
hands at that rate? The dealings of Dr. Gunton with similar 
bonds held by the Bank of Washington, over which he pre¬ 
sides, establish the same view. The amount in that bank at 
the time the trust was created, was £15,000, and these were 
disposed of at 86 in the summer of 1840. The shrewdness 
of my co-trustees, sharpened by their interest, would not have 
permitted them to lose the chance of getting 90 if it was to 
be got; and I rely upon their acts as conclusive proof that 
such a rate was not to be had, except for a trifling amount. 

It may not be amiss here to advert to another fact attending 
my sales. Not only did I make them at the favorable rates I 
have detailed, but the amount which I disposed of was nearly 
thrice the amount sold in the same time by my co-trustee Mr. 
Swan, and that too, to go no farther, with both simself and 
my other associate Dr. Gunton, in the market, ready and eager 
to avail themselves of every opportunity for giving vent to the 
bonds held by their respective banks. 

2 .—As regards the commission allowed the trustees it will 
no doubt excite your surprise to learn, that notwithstanding 
the allowance by the company of the commissions complained 
of, and its consequent inability to recede from that allowance, 
I voluntarily offered to the present president, Mr. Sprigg, to 
open the question and leave it to the decision of any respect¬ 
able gentlemen. The only condition I annexed to this offer 
was, that if the referees thought the compensation received 
too small they should make it what it ought to be. It seems 
to me that it would have been but fair for Mr. Sprigg to have 
mentioned this proposition to the stockholders. What his 
motives for declining it may have been, I cannot undertake to 
say, but shall leave you determine whether he apprehended 
equal ill fortune from arbitrations as from suits, it appearing 
according to him that in the latter “ the Company is invariably 
the loser.” 


6 


1 will nut, however, rest the propriety of the allowance 
upon the presumption which grows out of the offer I have 
made. I shall proceed to shew what I have said all along, 
from the time the board of directors voted the commission till 
now, that, it is too small not too large, and that the only per¬ 
son who has any reason to complain of it is myself. 

I have already mentioned that at the time the trust was 
created, my co-trustees alone had £-53,000 or thereabouts, to 
dispose of on account of their respective banks, and there was 
a large quantity beside in this city and elsewhere, seeking a 
market. It was soon found that £90,250, the amount held by 
the trustees could not be parted with, except at a great sacri¬ 
fice, and this was to be avoided, of course, if practicable. At 
the same time the holders of the script were daily bringing it 
in, and some expedient for meeting their demands became in¬ 
dispensable. It was at this juncture that the Chesapeake 
Bank, of which I am president, stepped in to the aid of the 
company. It agreed to advance from time to time such sums 
as were called for by the trust and to redeem the script at its 
own counter, the bonds being of course pledged to it to make 
good such advances. 

The purpose of this arrangement was to save the company 
the ruinous loss to which forced sales would probably have 
subjected it. Let us see how it actually operated. Had 
sales been made at 85 as the company originally requested, 
the bonds would have brought $340,944. As it was, they 
actually fetched $361,075, from which deduct the interest on 
advances $8,485, and the amount realized by a pledge instead 
of a sale is $352,590, being a difference in favor of the course 
adopted of g 11,646. 

Let not the services rendered then be assimilated, as they 
have been, to those of a broker whose action is merely that of 
selling add to that duty the further and heavier one of advan¬ 
cing and then estimate the rate which will compensate. No 
opinion, I presume on this subject can come in competition 
with that of George Brown, Esq., of the firm of Alexander 
Brown and Sons of this city. In his answer given upon oath 


7 


to a committee of the Assembly last winter, he stated it as his 
belief that no house would charge less than a commission of one- 
half to one per cent for a loan on Maryland bonds for GO or 
90 days. This then furnishes the first element for the calcu¬ 
lation. The Chesapeake Bank lay out of its advances on the 
bonds for six months. The allowance therefor according to 
Mr. Brown ought to be about two per cent. In addition to 
this must be computed a commission for sale, which in the re¬ 
port submitted by Mr. Cox to the general meeting is estimated 
at from one-eighth to one-quarter of one per cent, and I am 
willing to take the latter rate as correct for my present pur¬ 
pose. Then comes beside the labor of redeeming about 
$300,000 of scrip. To form a fair judgment of what this 
was, it is necessary to state that nearly $12,000 of this amount 
was of denominations below five dollars, and abount $6,000 of 
it consisted of the denominations of five, ten and twenty dol¬ 
lars, all payable on demand, and requiring constant calcula¬ 
tions of interest; what then would be a fair charge for such 
services ? 

I am happily able on this subject to give the opinions of the 
late treasurer of the company, of Dr. Gunton, and from their 
relation of a broker in Washington.* It so happened that for 
the convenience of the holders of scrip in that city, money 
was deposited by me with the Bank of Washington, and Mr. 
Fillebrown, a clerk in the company’s employ, was charged 
with the redemption of the paper, and claimed compensation. 
This claim he accompanied with the opinion of the gentlemen 
just named, that one-half per cent, was a fair charge, “ taking 
into consideration the circumstance that the time occupied 
was the company’s.” I cannot err therfore in assuming a 
quarter of a per cent, more for the same services rendered by 
myself, taking into consideration the circumstance that the 
time occupied was not the company’s. This item then, 
so ascertained, is three-quarters of one per cent., making in all 
three per cent, for advancing on the bonds, for selling them 
and redeeming the scrip. 


Appendix No. 1. 


8 


But is this all the service rendered ? The sales at 85 per 
cent, of £40,250 were made on six months credit. I guaran¬ 
tied the paper, and it was passed to the company’s credit as 
cash. The just equivalent for this would be about a half per 
cent, per month, or say two per cent, for the six months, and 
it will be thus seen, without going further into the calculation, 
that upon a fair estimate the usual rates of compensation would 
give the trustees five per cent. The actual allowance to them 
is two per cent. 

Let it be borne in mind moreover that the sales effected by 
the trustees, as the tabular statement already referred to de¬ 
monstrates, have been made to greater advantage than any 
other sales concluded by the company itself or its other agents. 

I shall dwell no longer on this part of the subject but dis¬ 
miss it with requesting your attention, for the facts it con¬ 
tains, to the order of the board allowing the trustees their 
compensation,^ and again expressing my willingness to open 
the question and submit it to referees on condition that they 
have power to augment the allowance if they believe it in¬ 
adequate. 

3.—1 now address myself to the charge that I have allowed 
the funds of the trust to be appropriated to purposes not men¬ 
tioned in the deed creating it. 

The item here alluded to is that of the acceptances of the 
company, held by the Chesapeake Bank, and by it retained 
out of the trust funds. A copy of one of them is given for 
your information as to their character.! 

When these acceptances were granted by the company, it 
was with the expectation that they would certainly be paid at 
maturity, and under this impression the bank discounted them. 
That expectation however was not realised, and as soon as it 
was ascertained that they could not be met, the company ar¬ 
ranged, with regard to all its paper of this description, to pay 
one-third and to give fresh obligations at six and nine months 
with interest for the balance. The Chesapeake Bank under¬ 
took to make the payments accordingly, with funds to be pro- 


Appendix No. 2. 


t Appendix No. 3. 


9 


vided for the purpose, but in a sufficiency of means even for 
this limited amount the company was disappointed. In this 
emergency it proposed to the bank to advance $5,000 to be 
applied towards the satisfaction of the cash payments on the 
acceptances. The bank assented, forebore to demand its 
third upon its own acceptances, and paid away that amount as 
well as the 85,000. 

At this period, let it be remembered, the bonds were ac¬ 
tually in the possession of the bank pledged to it to secure the 
advances it had made for the redemption of the scrip. The 
literal execution of the trust had been found impracticable. 
The power to sell, the only one conferred on the trustees, 
was nugatory for the time, and in exercising the power to 
pledge and borrow money they acted not by virtue of the 
deed of trust, but under an independent authority communi¬ 
cated by their principal from the necessity of the case. 

That it was competent for the company so to modify their 
action no one can doubt. The only limitation to its control 
over the terms of the trust, was its affecting thereby the rights 
of third persons, and I shall have occasion presently to demon¬ 
strate that no difficulty of this kind existed. 

The result consequently was to bring the bank into direct 
connexion with the company, and the funds of the latter thus 
coming to the hands of the former, every principle of equity 
justified it in reimbursing itself out of the balance of the trust 
moneys after the discharge of the scrip. 

I have said that the only check to the company’s power over 
the trust, and of course to rights acquired under that power, 
was to be found in the conflicting rights of third persons. 
The only claim ever made by any other person to the balance 
of the trust funds, was one advanced by the Bank of Potomac. 
Of this claim the trustees were not notified until after the 
acceptances held by the bank had become due, and when 
consequently its rights had attached. 

The conclusive answer however to the validity of this claim 
is to be found in the fact, that the order supposed to create it 
conferred and professed to confer no right to any part of the 
2 


10 


funds in the hands of the trustees, appointed by the deed of 
April, 1840.* The terms of that order confine its operation 
to the trust created by the deed of January, 1840; and under 
that deed, as I have already mentioned, no properly ever 
passed, the same having fallen to the ground by the refusal of 
the trustees named in it to accept it or execute its provisions. 

4.—I now pass to my refusal to pay over the balance in my 
hands. 

The answer to this charge shall be short but conclusive. 
An attachment issuing out of the Circuit Court of the United 
States, at the suit of a judgment creditor of the company, has 
been laid in the hands of the trustees. A bill is also depend¬ 
ing in Chancery against the trust fund, brought by the Bank of 
Potomac for the recovery of its claim. Uunder such circum- 
stances it cannot be expected that I should part with the bal¬ 
ance until legally exonerated from responsibility to these liti¬ 
gating parties. 

I have thus disposed of the direct charges against me. 
When the insinuations against the Chesapeake Bank or myself 
shall take the shape of positive assertions in any respectable 
quarter, they will be met and refuted. Till then I shall not 
condescend to notice them. 

A few words now as to my co-trustees and I shall have 
done. The whole burthen of the trust from first to last fell 
upon my shoulders. Dr. Gunton never took any part in its 
labors, and would not even redeem a few thousand dollars of 
scrip for which I furnished the money in Washington. The 
sum of Mr. Swan’s toils was to pay two visits to New York, 
for which he asked and obtained his expenses. Whether the 
indifference of these gentlemen is accounted for by the fact 
that the banks over which they presided held large amounts 
of State bonds, and were anxious to sell them, I cannot say, 
but it is certain that my efforts for the trust were not dis¬ 
tracted by any such conflicting interests. 

It seems to be the impression, however, of Dr. Gunton, that 
he did actually on more than one occasion exert himself for 


Appendix, No. 4. 


li 


the promotion of the trust. I learn this from the report made 
by Mr. Cox to the general meeting in June, which states that 
the Doctor informed the committee on the trust of his having, 
with Mr. Swan’s concurrence, earnestly advised sales in July 
at SS and in September at 90. There must certainly be a 
mistake here. By the terms of the deed of trust, its powers 
were exerciseable by a majority of the trustees. If Mr. Swan 
united with Dr. Gunton in advising sales in July at 88, and in 
September at 90, how is it that sales were not made by them 
accordingly? It is a fact too that Dr. Gunton himself sold in 
August for the Bank of Washington, £15,000 at 86. How 
could the rates then in July und September be as stated? It 
would be great injustice to the president of the Bank of 
Washington to think it. I am persuaded therefore that the 
Doctor, who seems prone to error on this subject, has alto¬ 
gether deceived himself in supposing that he ever made any 
exertion to discharge the duties of a trustee under the deed of 
the company of April, 1840. 

My other co-trustee, Mr. Swan, labors under a similar mis¬ 
apprehension as to the extent and value of his services. In his 
letter of the 4th May, 1841, (published with the proceedings 
of the general meetings) he styles the apportionment of the 
commission between us, as made by the company, “ most un¬ 
just to him.” The weight to be attributed to this opinion you 
will be better able to estimate when you are informed that 
/ Mr. Swan is mistaken in every material statement made by 
him in the same letter. I will particularize a few of them, 
and subjoin his communication for your more convenient re¬ 
ference.* His demand of his expenses, according to him, 
was made before he knew of any commission being allowed. 
The order allowing commission was passed the 6th March, 
1841. Mr. Swan’s receipt for his travelling expenses bears 
date the 18th March, lS41.f The bonds, according to him, 
were deliverable in New York at “ his risk and expense,” and 
he italicizes these words to give the greater positiveness to 
the statement. The written contract of the purchasers, irn- 

* Appendix No. 5. t Appendix No. 6. 


12 


poses no such duty on him.* He became responsible, he says, 
for more than gl 50,000 for the bonds sold at six months. 
The order of the board of 8th March, 1841, apportioning the 
commission, establishes the fact that the cashing of the sale 
was effected through my individual guaranty.f Lastly, he 
declares himself never to have made any claim or demand on 
the company for services, or as he amplified the statement to 
the committee on the trust “ that he made no claim for any 
pecuniary compensation, and would have been satisfied had 
the board only acknowledged his services by a vote of thanks.” 
Mr. Swan was a director, and the minutes of the board of the 
6th March, 1841, will shew that he was present on that day 
and voted for the resolution allowing the trustees their com¬ 
mission. The letter of Mr. Thomas of the 8th March, 1841, 
will also demonstrate that he took part actively in its passage, 
and while admitting the superiority of my claims, required 
nevertheless something for himself.J A copy of the check 
given him for his share of the commission is subjoined.§ 

I now submit myself to your candid consideration, and await 
with confidence an approving judgment. 

JOHN S. G1TTINGS. 

Baltimore , October 7, 1841. 

* Appendix No. 7. f Appendix No. 8. 

i Appendix No. 9. t Appendix No. 10. 


APPENDIX. 


No. I. 

Washington City, 27th November, 1840. 

Dear Sir: 

Herewith I transmit the opinion of Mr. Barnard, the late 
treasurer of the Chesapeake and Ohio Canal Company, as to 
the compensation which ought to be allowed to Mr. Fille- 
brown, for services in redeeming the promissory notes of the 
company, and concurring therein, I earnestly recommend the 
allowance of that compensation—the amount of notes redeemed 
I understand to be $9,000. 

Yours, very Respectfully, 

W. GUNTON. 

J. S. Gittings , Esqr. 


I think that the compensation to which Mr. Fillebrown may 
be entitled for redeeming the promissory notes of the Chesa¬ 
peake and Ohio Canal Company, should be one-half per cent, 
upon the amount to be redeemed by him, and in this opinion I 
am fortified by the concurrence of Mr. Fowler, the broker, 
who, with myself, took into consideration the circumstance, 
that the time occupied in the matter was the company’s. 

I give this at the request of Mr. Gunton and Mr. Fille¬ 
brown, by whom the subject was referred to me. 

ROBT. BARNARD, 

Late Treasurer C. fy 0. C. Co. 21th JYov. 1840. 



u 


No. 2. 

Extracts from the Journal of Proceedings of the President and 

Directors of the Chesapeake and Ohio Canal Company. 

March 6, 1841. 

Messrs. Swan and Gittings, being present, reported (in 
addition to sales heretofore reported) of Maryland sterling 
bonds, transferred to them in trust, for the redemption of scrip 
of this Company, the following : 

To Oelricks & Lurman £40,250, a 85 per cent, on an 
average credit of six months. 

Mr. Gittings submitted the following statement in addition : 

The trustees have sold =£90,200, and have redeemed about 
$3 10,000 of currency notes. The sales were made by J. 
Swan and J. S. Gittings. The money advanced to redeem 
the scrip was advanced by J. S. Gittings, through the Chesa¬ 
peake Bank. 

The average amount which the Chesapeake Bank was in 
advance to the trustees, or Chesapeake and Ohio Canal Com¬ 
pany, for six months, was $ 150,000. 

It is for the Canal Company to determine upon the advan¬ 
tages derived by them from this advance, and the loss sus¬ 
tained by the Chesapeake Bank by locking up so large an 
amount of her funds, and fix a commission for the trustees, 
and a separate allowance for John S. Gittings or the bank. 

Whereupon, in consideration of the fact that the trustees 
have obtained advances amounting to $150,000, on an average 
credit of six months, to enable them to redeem, on demand, 
the scrip of the Company, without making a sacrifice of the 
bonds by forced sales, for which advances the trustees under¬ 
take to compensate the bank; and in consideration that the 
trustees make equivalent to cash the six months’ notes, for 
which the last £40,250 were sold, the sale having been made 
for 85 on credit, when a much less sum must have been real¬ 
ized to the Canal Company, if the bonds had been forced upon 
the market; it is 

Resolved , That the trustees be allowed two per cent, on the 
amount of sales of all the bonds conveyed to them, in full for 
all charges and claims for them, or their agents, in the execu¬ 
tion of the trust. 

Resolved , That the trustees be authorized to allow, in the 
settlement of their account with the Chesapeake Bank, at the 
rate of six per cent, per annum, and no more, for all sums ad¬ 
vanced by that institution. 


/ 


15 


No. 3 

Cumberland, February 15, 1840. 
To the President and Directors 

of the Chesapeake and Ohio Canal Company. 

Gentlemen: 

Six months after date, pay to William P. Sterritt, or order, 
one hundred and twenty-five dollars, on account of work done 
on Dam No. 8, and Guard Lock of the Chesapeake and Ohio 
Canal. M. C. SPRIGG, Com C,8f O. C. C. 

$125. CHARLES B. FISK, Chief Engineer. 

Accepted under order of 24th January, 1840. 

$125 JOHN P. INGLE, Clk. C. O. C. C. 

February 25, 1840, 


No. 4, 

The President and Directors of the Chesapeake and Ohio 
Canal Company, in meeting, April 15, 1840: 

Ordered , That the work done by the Alexandria Canal 
Company, on the northern abutment of the Potomac Aqueduct, 
passed by the Board on the 8th inst. be paid as follows, viz : 
Two thousand dollars in cash, and the bond of the Chesapeake 
and Ohio Canal Company, payable at six months after date, 
with interest, for seventeen thousand three hundred dollars and 
seventy-nine cents. It was further ordered, that, as, security 
for the punctual payment of said bond, at its maturity, any 
surplus of money or State bonds, which may be in the hands 
of James Swan, John S. Gittings and Wiliam Gunton, the 
trustees appointed on the 22d of January last by this Board, 
for certain purposes, after they shall have closed the trust then 
created, be, and the same is hereby pledged and set apart. 

Extract from the Journal. 

(Signed) Test, JOHN P. INGLE, Clk. C. $ 0. C. C 



16 


No. 5. 

Baltimore, May 4,1841. 

Dear Sir, —Yours of the 30th ultimo containing interroga" 
tories from the Canal Company, was received this day, and I 
hasten to reply to them in the order in which they are pro¬ 
pounded. 

1st. The trustees had no authority to pay the acceptances of 
the Canal Company; the fact of such payment having been 
made, was not known by me until very recently. 

In reply to the 2d inquiry, I have to state that in December, 
1840, acting under the belief that the contemplated resumption 
of specie payments by our banks would reduce the price of 
all stocks, I proposed to Mr. Gittings to go to New York for 
the purpose of disposing of the sterling bonds then remaining 
in our hands; the travelling expenses were paid by Mr. Git¬ 
tings, and charged to the company with my consent, as I did 
not know at that time that any compensation would be made 
to the trustees, other than their actual expenses. In March, 
1841,1 again went to New York for the purpose of placing 
on board the steamship President, the bonds sold to Messrs. 
Oelricks & Lurman of this city, it being part of the contract, 
that they were to be delivered in New York at my risk and 
expense. The charge in this instance (less, I think, than $30) 
was made for travelling expenses, but ought, in fact, to have 
been deducted from the amount of sales of the bonds. 

Mr. Gittings will doubtless explain the item for Mr. Fille- 
brown’s services *, I know nothing of it. 

The last question, under the order of the Company of the 
28th April, I answer by saying that I have never made any 
claim or demand on the Company for services; the fact of my 
having become personally responsible for the payment of more 
than $150,000 for bonds sold at six months credit, at a price 
far beyond what they would have sold for cash, would have 
justified me in making such a demand. The commission al¬ 
lowed by the board, however, at their meeting on the 6th 
March last, was in my opinion ample, and although the appor¬ 
tionment of that commission, between Mr. Gittings and myself, 
made on the morning of the 8th March, was most unjust to me, 
I have never made any complaint to the Company. 

The information asked for in the order passed on the 30th 
April can be given by Mr. Gittings, in whose hands the bonds 
were placed. 

Very respectfully, yours, 

J. SWAN, Trustee. 

Thomas Turner, Esq., Clerk , fyc. 


17 

No. 6. 

J. Swan and J. S. Gittings, Trustees, 

To James Swan , Dr. 

1840. Dec. To Expenses preparing Deed of Trust, $ 4 00 

To Expenses in part to New York, 13 00 

1841. March. To Expenses to New York to deliver 

Bonds according to contract, 29 30 


$46 30 

Less paid by J, S. Gittings, 13 00 

$33 30 

Received payment, Balt. March 18th, 1841. 

J. SWAN 


No. 7. 

We hereby agree to purchase from J. S. Gittings and James 
Swan, trustees, £40,000 five per cent. State of Maryland Ster¬ 
ling Bonds, §444.44 at 85 per cent, payable in paper, to be 
approved by John S. Gittings, at an average of six months, 
and the Bonds to be delivered in New York to our order. 

E. G. OELRICKS & LURMAN. 

Baltimore Feb. 25, 1841. 


No. 8. 

March 8, 1841. 

Ordered , That the two per cent, allowance to the trustees, 
Messrs. Swan and Gittings, for the execution of the trust, be 
apportioned between them, so that Mr. Swan shall receive one- 
half of one per cent, on the proceeds of the sales of the bonds, 
and Mr. Gittings shall be allowed one and one-half per cent, 
on the proceeds of such sales, it being understood that Mr. Git¬ 
tings is entitled to this amount in consideration of the fact that 
this Company is chiefly indebted to him for procuring the ad¬ 
vances made to the benefit of the Canal Company, and in 
consideration of the fact that he is to make equivalent to cash 
the six months notes, for which the last sale of £40,250 was 
made. 


3 






18 


Ordered , That all and every part of the resolution of Satur¬ 
day, March 6th, on this subject, supposed to be inconsistent 
herewith, be, and the same is hereby rescinded. 

True extracts from the Journal of the 6th and 8th of March, 
1841. THOMAS TURNER, Clk. C. O. C. C. 


No. 9. 

Frederick, March 8, 1841. 

Dear Sir: 

I was much surprised on reading your letter to-day, to hear 
that Mr. Swan claimed a full half of the per centage allowed. 
He was present when the order, making the allowance, was 
passed, and as Mr. Markell and myself well remember, stated 
again and again, that he had no claim to an amount equal to 
that which ought to be allowed to you, if you were to under¬ 
take to compensate the Chesapeake Bank. Supposing from 
his declarations that you and he would not find it difficult to 
apportion the allowance, we omitted on Saturday to make the 
apportionment. On the receipt of your letter to-day I brought 
the subject up, and an order was adopted by the board, de¬ 
claring that you are to have one and a half per cent., and Mr. 
Swan one-half of one per cent, of the two per cent. The 
order of Saturday was rescinded, so far as it might be con¬ 
strued to conflict in any way with the order of to-day. In 
the order of to-day it is stated that the additional allowance 
made to you as compared with that made to Mr. Swan, is 
done in consideration of the fact, that through your agency, 
the $150,000 had been advanced to the Canal Company ; and 
in consideration of another fact, that the six months paper, for 
which the last sale was made, is to be passed at par to the 
credit of the Canal Company, in account with the bank from 
which the advances of the §150,000 were made. I do not 
understand the motive of Mr. Swan for stating to you that I 
had spoken to the board of complaints made to me as to the 
kind of funds in which the scrip was redeemed, and of the 
advantages derived to the Chesapeake Bank by such an opera¬ 
tion. I said nothing on those subjects after you left differing 
from what passed in your presence, and if Mr. Swan should 
make a contrary statement it will be erroneous. In speaking 
of the funds in which the scrip was paid, and of the advan¬ 
tages derived to the bank, I did not intend to maintain that by 
that operation the bank derived an advantage equivalent to its 



19 


sacrifices in advancing $150,000, and now waiting six months 
for its reimbursement. I referred to those matters by way 
of an apology for not allowing to the bank a larger compen¬ 
sation than that which we have made. If the bank had been 
compelled to pay in Baltimore or in New York funds, the 
$150,000, surely we would have given more than we have 
now given. 

I am not certain that these matters were talked of at all be¬ 
fore the board in your absence. But if they were, I repeat 
that any statement intended to convey the impression that I 
spoke of them out of your presence in a manner or for a pur¬ 
pose differing from that in which I spoke, while you were in 
the room of the directors, is not founded in fact. 

That you may make due allowance for the plain manner in 
which I have expressed myself, on this point I desire you to 
reflect that I never wear two faces, and am always indignant 
at any attempt to make the contrary of this appear. 

Yours, very respectfully, 

FRANCIS THOMAS. 

J. S. Gittings , Esqr. 


No. 10. 

Baltimore , April, 1 3th, 1841. 

$1720 58. 

Cashier of the Chesapeake Bank pay to James Swan, 
Esq. or order, seventeen hundred and twenty dollars and fifty 
eight cents, being the amount of commissions allowed him by 
a resolution of the President and Directors of the Chesapeake 
and Ohio Canal Company, March 8th, 1841. 

JOHN S. GITTINGS, Prest, 


(Endorsed) J. Swan. 












































